Self-Sustaining Athletic Departments: More Than What Meets the Eye

Yesterday the list of self-sustaining athletic departments came out. The good news is the number grew to eight more schools than last year. The bad news is the number is 22. That’s just shy of 10% of all public Division I institutions.

Here’s a look at the 22 schools who turned a profit in the athletic department without having to rely on student fees or other forms of support from the university (including government funds):

You know I like to give you more than what most media spoon-feeds you, so here are some thoughts and questions not covered in the USA Today article:

Why are some of these schools still taking in student fees when they’re turning a profit? I’ve detailed for you before which athletic departments take in student fees (SEC, Big Ten and Big 12; ACC, Big East, Pac-10). Offenders here: Georgia, Florida, Oregon, Iowa, Oklahoma State, Kansas State, Virginia Tech, and West Virginia. I’m not including Indiana who shows a negligible $23.00 in student fees.

This chart does not tell the whole story. It gives a very skewed view of what is going on at these schools. For example, both LSU and Ohio State write checks back to their universities. I recently showed you how Ohio State gave $1 million to library renovation last year, one of nine such payments over a nine-year period, amongst other funds given back to the university. This money is treated just like any other expenditure when it comes to the chart above. So, while Ohio State may appear to be at the bottom of this list, there are plenty of schools above it who have shown no evidence giving back to their university for anything other than required expenses. Also, props to my alma mater, Florida, for donating over $6 million back to the university last year to help cover cuts in its operating budget passed down from the state.

The focus of the USA Today piece and much of the commentary I’ve heard about it today is how many schools are out-spending their means. What I see is a clear case for why Division I football is too inclusive. Florida International will never be able to compete against Alabama in football. Period. There’s no reason for them to be in the same Division.

48 thoughts on “Self-Sustaining Athletic Departments: More Than What Meets the Eye”

It’s not just student fees. Washington receives about $2 million a year from the state of Washington to offset Title IX costs even though it has operated in the black for years. Florida also (I believe) receives state aid as well. And some of these schools get direct institutional aid.

I can understand why some of these schools like Indiana and V-Tech would need to rely on allocated revenue (revenue not generated from athletic department) since they are likely year to year on whether or not they are going to operate in the black. But I don’t see any reason why the Alabamas and Michigans of the world keep taking student fees/state support/direct institutional when it’s clear they are not going to need it.

Florida receives 0$ from the state for it’s entire athletic program. All of the money is generated from booster donations, tickets, and television contracts. The two money making sports, men’s basketball and football pay for ALL of the other sports programs on campus, and then they still have leftover money to donate to the academic university every year. 6million $ this past year. This means the insane salaries that the head coaches get are fully funded by the sports programs. The state of Florida pays 0$ for them, unlike some schools such as FSU where the state taxpayers have to pay their head coaches salaries.

What it tells me is that the leadership of college football is a joke. These schools have no business taking in student fees when Jim Delany admits in front of congress that these schools are leaving money on the table by not having a playoff system. The AD’s & school presidents should be embarassed.

Since you have this “broad brush” of financial information, do you have the actual statements which show how revenue and expenses are itemized? Which sport is bringing in the most money? Which cost the most? I have my suspicions but would like much more detail.

I do have itemized statements for some on this list. Haven’t ever seen a sport other than football or men’s basketball turn a profit. You can use the search box on the right-hand side of the site to search for posts I’ve done on Ohio State and Georgia’s itemized budgets.

i’m always surprised to see business oriented people take an investment by university administrators and turn it into some form of “college spending out of control” argument.

University administrators invest in the English Department, the Law School, and so on, and in Athletics. There are returns that matter to university administrators that do not show up on the athletic department annual operations.

It’s really a bit like saying that Ford should shut down the motor division because it doesn’t turn a profit standing alone. Ford vehicles aren’t nearly as valuable at the end of it all without engines. Students and university administrators are less well-off without athletics and the only place to find that value is across the university at large.

Besides, assuming the university investment is required to make ends meet assumes that ADs would continue to operate at the same level without the university investment shades the discussion. Even Business 101 students know that if a revenue source disappears they must scale back operations.

Kristi, when will you publish your book? Can we get a sneak preview? My next (and first) book will be about “Professional College Football (and Basketball)” players. Maybe we’ll be writing about the same things?

I got your email about Michigan lacrosse. Looking into this list I want to see what schools could meet the requirement of having the sport. However, I was making a point about national branding in my sport. Oregon tops the list as the most profitable, but is it a national brand to those who don’t know much about college sports? What are merch sales like? I know a lot of Oregon’s money comes from Phil Knight. Is there any way to get the split between donations, merch revenue, and student fees? Merch revenue, while definitely not as significant as donations usually, can be a sign of how successful your school is at making money long term. Beyond that requirement there’s no excuse why Oregon shouldn’t have a team (especially since their team is actually decent at the club level).

Looking down your list, a lot of the schools are southern schools, which would probably be the last I’d beg to have lacrosse teams (not that I wouldn’t want them to; I just think they’d think ill of me if I started writing about it) except in Florida’s case, and they already have a women’s team so Title IX would be hard to get past for them to establish a men’s team.

The next two teams on this list I could conceivably see as having teams are Purdue and Michigan State, the latter of which actually fielded a team for some time. The only other two teams I could see are West Virginia and Virginia Tech due to their proximity to lacrosse hotbeds. Penn State and Ohio State both already field teams.

You mention no athletic programs are profitable outside of football and basketball programs. You might take a look at LSU’s baseball program. From what I hear, they are profitable, drawing 10K fans per game and leading the nation in attendance for over 10 years in a row.

I think I usually say “generally” they are the only profit-producers, or similar wording. I’m sure there are exceptions here and there, although I haven’t seen them yet. Remember that even if the sport is producing revenue, expenses are high from coaches salaries to scholarship costs. Florida baseball is similar to LSU and still loses money. I believe SC baseball does as well.

“What I see is a clear case for why Division I football is too inclusive. Florida International will never be able to compete against Alabama in football. Period. There’s no reason for them to be in the same Division.”

Before I begin my argument against this, I want to explain that I went to Alabama for Grad School, and I will be the first to admit that in college football there is an “Old Boys Network”. However, I am sick and tired of hearing the statement listed above because there is proof in recent years that the smaller programs can not only beat a powerhouse, but can join a power conference as well. Below, I will explain how not one but two colleges have gone from a non AQ conference to becoming a member of an AQ conference

Under the current system of college football, if a team finishes the season ranked #1 or #2 , then they would be allowed to play in the BCS National Title Game. Every year both of those teams have belonged to one of the current AQ conferences which are the ACC, Big 10, Big 12, Pac 12, SEC, the Big East for now, and Notre Dame as well. If Boise St finished #2 in the BCS standings, then they would play for the National Title. However, the question is would a Boise St. or any team from a non AQ ever finish #1 or #2 in the current BCS Standings? Honestly, probably not because 2/3 of the standings come from either current coaches, AD’s, or former coaches and AD’s, which means the majority of current votes are from members of the “Old Boys Network”.

However, the current BCS system placed multiple rules into effect that started during the 2004 season that would allow a team from a non AQ conference go to a BCS Game. These rules created a ripple effect across college football that is still being felt.Teams such as Boise St, Utah, and TCU became household names because they proved multiple times that David could beat Goliath. For example, once Utah beat Pitt in 04 Fiesta Bowl it gave hope to all the small schools, but the Boise St win over Oklahoma in the 07 Fiesta Bowl (was still the 06 season) could be the one of the most important wins in the history of college football because it proved that Utah was not a fluke. In 2007, smaller programs started upsetting teams that have been national powers for decades in their own backyards, Appalachian St,beat Michigan, Louisiana Lafayette beat Alabama, Navy beat Notre Dame. Then in 08 Utah blew out Alabama in the Sugar Bowl to become the only non AQ team to win multiple BCS games, which gave them the credible to be able to compete in a power conference. Since the rule change in 04 which allowed non AQ teams to go to a BCS game, there have been 7 different appearances among four different teams (Boise St (2), TCU (2), Utah (2), and Hawaii), and they have only Hawaii has lost to a team from an AQ conference.

During the last half of the 2000 decade, certain teams from non AQ conferences gained so much respect that programs that had dominated football for decades refused to play them. Utah agreed to join the Pac 12 just before the 2010 college football season. TCU, which actually had recently had a more successful football program compared to Utah (during the 00′s, TCU finished in Top 25 8 times compared to Utah’s 4) followed the blueprint that Utah had laid out for the nation, and announced that they had joined the Big 12 during the 2011 season. Thus, two colleges whose football programs had little success until roughly 2000 were able to build a football program respected enough to join AQ conferences. As a result, both teams were eventually able to move into the Pac 12 and Big 12. Now that they are in the “Old Boys Network”, if either of them was the only team to finish the season undefeated, then there will be playing for a National Title. My point is that there is now evidence of multiple colleges being able to not only beat Goliath, but they are able to become Goliath.

Also, there is a direct and immediate financial benefit by joining an AQ conference from a non AQ conference, and that is the additional revenue created by the football tv deals. Colleges in the AQ conferences are each receiving $17 to $25 million depending on which conference they are in. Depending on their previous budget some athletic departments can double or triple their budget on the revenue from television alone. Therefore, there is the potential that the athletic department could create more successful programs by hiring a better coaches, or building better training facilities that can attract better recruits.

In conclusion, it has been proven that it is possible for colleges from smaller conferences to join a bigger conference, and instead of being the underdog they now have the ability to become a power house. Both Utah and TCU, have not sustained success over a period of decades, but they each have one successful decade with the chance to build a winning tradition that can last for decades to come.